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| Rupee at 3-month high, up 12 paise |
| Agencies / Mumbai Feb 03, 2012, 00:33 IST |
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Extending its rally for the third day, the rupee on Thursday rose by another 12 paise to end at a fresh three-month high of 49.15 against the dollar on bullish stocks, amid sustained dollar selling by banks and corporates.
Increased capital inflows also helped the rupee rise, while a firm dollar restricted the rupee surge to some extent, a dealer said.
At the Interbank Foreign Exchange (Forex) market, the local currency resumed strong at 49.05/06 a dollar, from the last close of 49.27/28 on firm local stocks and rose beneath 49-mark to a high of 48.94.
However, late dollar demand from importers amid firm dollar overseas weighed on the rupee and it fell to a low of 49.26 before recovering some ground to end at 49.15/16, still showing a rise of 0.24 per cent.
Bonds gain
10-year bonds gained for a fourth day, extending this year’s gains that have driven yields to a nine-month low, as the central bank’s plan to purchase debt shored up demand.
The Reserve Bank of India will buy as much as Rs 10,000 crore ($2 billion) of fixed-income securities tomorrow, it said in a statement on January 31. The RBI has bought Rs 71,900 crore of notes since November, to ease a cash squeeze in the banking system.
“Bond purchases are driving yields lower,” said M Natarajan, head of treasury at Bank of Nova Scotia in Mumbai.
Call rate downward
The call rate fell back on a surfeit of liquidity in the system. The overnight money call market reacted downwards to conclude at 8.75 per cent, from 8.90 per cent yesterday. It moved in a range between 9.05 per cent and 8.50 per cent.
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